Canola Down with Soy Complex, Prairie Rains

Canola futures ended weaker on Thursday, with the nearby July contract down its $30/tonne daily limit and more modest declines in the more deferred months.

Traders bailing out of long positions accounted for the selling pressure in July, with most of the commercial attention now on the new-crop contracts. Domestic crushers and line companies are generally pricing off of the November contract, for both old- and new-crop business, due to the volatility in July.

Losses in the Chicago Board of Trade soy complex and strength in the Canadian dollar contributed to the declines in canola. Widespread rains across Western Canada were also bearish for values. However, more precipitation will be needed going forward, with canola still looking relatively cheap given the tight supplies and solid demand projections.